This Telecom Giant Has Further Upside Room: Analyst

Verizon shares are trading around their highest levels in more than two years, but don’t start taking profits yet! So said Christopher King, senior telecom services analyst at Stifel Nicolaus. He believes the rally will continue going into next year.

“We’ve seen strong performance this year from a lot of yield-oriented names such as REITs [real estate investment trusts] and other telecom companies that also offer high dividend yields...so that’s been a big component of the outperformance,” King told CNBC.

King has a “buy” rating on the telecom stock and said Verizon is “very well positioned” going forward, based on excitement around their fourth generation (4G) wireless network, also known as LTE.

“They’re going to be introducing their first handsets for that next week at the CES in Las Vegas,” he explained. “They are winding down the spending related to FiOS which has been their $23 billion capital expenditure related to the home on the residential side. So they now have very nice scale advantages with that and you should see some improvement in wireline margins.”